Spain's Bankia Suspends Shares On Bailout Rumors

Spanish bank Bankia has seen its shares suspended amid speculation the troubled lender will approach the government for a bailout of more than €15 billion ($19 billion).

Bankia, Spain's fourth largest bank, reportedly asked for the suspension ahead of a board meeting on Friday afternoon aimed at redrawing its accounts for 2011 and submitting a plan to bolster its finances.

The suspension comes after European leaders actively talked of debt-stricken Greece leaving the euro zone this week, while disagreeing over whether austerity or growth was the best option to boost ailing European economies.

Last week, Bankia had to calm its customers after a Spanish newspaper reported a run on the bank.

On Wednesday, Spain's economy minister Luis de Guindos said the government would lend Bankia at least €9 billion, adding that even more funding was available if needed.

Bankia has huge exposure to real estate and bad loans, much larger than other banks, Professor Santiago Carbo Valverde of the University of Grenada, told the BBC.

Other banks may have trouble as the government is demanding more capital, but I don't think we will have another big case like Bankia.

The three largest ones are in better shape as they have lower exposure to bad loans and they are more internationally diversified.

Bankia was originally formed in 2010 by merging seven struggling regional banks and is heavily exposed to €32 billion of bad property loans.